What Happens when You Cannot Pay Mortgage on Time

by Dmitry Vasenyov on January 27, 2012

Paying your mortgage on time is an important part of proper financial management as late payments will have a negative impact on your credit ranking. Aside from this, they will incur a later payment charge from the mortgage provider.

However, for many people late payment is not just a temporary slip, but as well an indication that the mortgage is becoming unaffordable. A rise of interest rate or a struggle to keep on the top of the finances could become an issue which threatens the loss of your home.

Nowadays a lot of people do not address the problem while struggling to maintain their mortgage payments. However those who contact their broker early could be able to negotiate and come to an arrangement over payments. Especially this is crucial for those who have acquired in their home and stands to lose more than just a house in case of foreclosure, but at the same time the built up equity in the property, including any initial down payments which were made.

There are a lot of different options available to borrowers who are prepared to deal with the problem head on instead of ignoring it as a lot of people do. Remember that if the problems you are currently experiencing are temporary ones, then the lender could be amenable to a repayment plan or a reinstatement.

In case of reinstatement the date is agreed on whereby you promise to pay back the missed payments as well as any outstanding fees. As an alternative, the lender could agree to a repayment plan where missed payments are added to the future payments.

As well, you can discuss a forbearance plan with your lender, where the mortgage payments are temporarily suspended for an agreed period of time. When the mortgage payments are resumed you just add the part of missed payments to the monthly mortgage payment till the outstanding amount is paid back.

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